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What Jerry Brown does not talk about.


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2015 Apr 3, 10:20am   15,997 views  27 comments

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Water Subsidies and Shortages in the American West

OCTOBER 28, 2013Ryan McMaken
TAGS Free MarketsInterventionism

The Los Angeles Times reports that the West is running out of water. Articles about water shortages are a perennial feature of local newspaper coverage in the American West, but the Los Angeles Times is right. The West really doesn’t have enough water to maintain the status quo.

It’s not global warming or suburban sprawl that is the primary source of the problem. Indeed, the West is no more dry now than it has been at various times through the centuries for which we have a little knowledge about the climatic conditions here. And suburban and urban residents use only a fraction of the water consumed in the West.

To find a clue about the real source of the problem, we need only look to the Times article itself:

Thanks to reservoirs large and small, scores of dams including colossi like Hoover and Glen Canyon, more than 1,000 miles of aqueducts and countless pumps, siphons, tunnels and diversions, the West had been thoroughly re-rivered and re-engineered.
Rain doesn’t fall much in the West, so to get water, the people need to go to the water in the rivers, or the water in the rivers needs to be shipped to the people. That’s where all those aqueducts and tunnels and diversions come in.

In an America without the massive coercive power of the federal government, the population centers in the West would generally be near the water sources where irrigation and drinking water would be cheaper and easier to use. When powerful interest groups own land far away from water sources, on the other hand, there is no “solution” so impractical that billions of taxpayer dollars can’t make it happen. The politicians will simply see to it that the water is moved where the lobbyists tell them it should have been in the first place. The result is that farmers will grow water-thirsty crops in central Arizona and central California where water must be transported over mountains and across hundreds of miles of arid landscape.

Water shortages occur in the West not because too many people are flushing their toilets too often, but because agriculture, heavily subsidized through cheap water made possible by the federal government, continues to grow crops in places that would never support agriculture on a similar scale in a free market. Indeed, agriculture uses well over 80 percent of all the water used in Western states, and most of that water is stored, pumped, and diverted using dams, pumps, and aqueducts paid for by the U.S. taxpayer.

As a result, growers don’t have to face the real-life costs of transporting water to their farms. They only need consider the subsidized price, which is far below what it would be in a private market. Consequently, water usage for growers across the West is much greater than what it would be were there a functioning market for water in the region.

While there are some historical cases of locally-funded major water projects, such as the original Los Angeles Aqueduct, the management of water resources in the West has been dominated by the federal government’s Bureau of Reclamation. Although created in 1902, the Bureau exploded in size and importance during the Great Depression as a part of the New Deal. From Hoover Dam to countless smaller dams and diversion projects, the Bureau became an influential bureaucracy with immense power in the West.

Naturally, the fact that taxpayers pay for all this does not mean that the taxpayers control the water. The most important resource in the West is in fact mostly controlled by Congress and the Bureau of Reclamation, and indirectly by growers and other special interests. Water is distributed in the West not by markets and market prices, but by the political process.

In an arid place like the West, the political control of water translates to the political control of entire sectors of the economy. Writing in 2004, economist William Anderson noted:

No private firm would distribute a precious commodity like water in a desert in the way that the Bureau of Reclamation has done it. While the subsidized farms in the West are private, the federal government owns the main input that is needed for their crops: water. Thus, the term “private enterprise” here is meaningless, since the farms are wards of the state.
The fact that many farms are “wards of the state” as Anderson calls them, does not trouble the more influential growers much, as agricultural interests remain extremely influential in Western states, and they indirectly control most of the water.

What is the justification for such a situation? The virtues of subsidized water are sung using the usual arguments for corporatism and crony capitalism. We’re told that what’s good for the Western farmer is good for America. It’s a matter of national security. Local economies will collapse without agriculture. Subsidized water “creates jobs.” It’s a way of life that must be preserved. And so on.

The political support behind the growers’ continued use of the vast majority of the water resources to grow cotton and pecans in a brutally-hot parched desert is a classic case of politicians supporting what is seen over what cannot be seen.

We can look out over the vast fields of crops in central California and Arizona, where few crops could grow before the federal government taxed families and workers to make it possible, and claim that the alternative is unthinkable. The alternative, of course, is unknown and unseen.

The hundreds of billions of dollars spent over the years to get water to growers and other politically well-connected interests could have been spent on other things. What other things? We’ll never know now, but the Central Arizona Project, which pumps water up 3,000 vertical feet and moves it across 160 miles of desert from the Colorado River to central Arizona at a cost of at least $4.7 billion, would probably not be one of them. Most of that is paid for by people who will never live in Arizona.

Although the special interest groups don’t see it this way, the fact remains that the development of the West, dictated by water, has been dominated by the federal government and its friends for at least 75 years. It props up industries unsuited to the realities of the Western deserts, while populations rely more and more on a diminishing resource controlled by an aging infrastructure of taxpayer-funded boondoggles. Is it any surprise that the West now faces some serious water problems? In spite of this, there is one thing we can know for sure: we’ll be told that the federal government is our best hope for solving the problem.

http://mises.org/library/water-subsidies-and-shortages-american-west

#environment

Comments 1 - 27 of 27        Search these comments

1   zzyzzx   2015 Apr 3, 12:53pm  

http://www.wpr.org/great-lakes-have-above-average-water-levels-first-time-century
Great Lakes Have Above-Average Water Levels

Specialist Says Increased Levels Are Due To Uptick In Runoff Over Past 2 Years

ydrologist Drew Gronewold of the National Oceanic and Atmospheric Administration said new data show all five great lakes are above their September average.

“That hasn't happened since the late 1990s,” he said.

Gronewald said there have been two years of above-average snow and rain runoff into the lakes in the spring, and less of the typical decrease in the fall. He said that’s happening partly because there’s less evaporation, “but also there have been wet falls over the past couple of years.”

Gronewald argued that in general, the rising water levels are helpful, “particularly (for) people who interact with the coastline, who have homes or cottages that they need to have access to.”

He added that they also “relieve pressure on industries who rely on the water through intake structures.”

2   Ceffer   2015 Apr 3, 11:01pm  

The Great Lakes have more water because Antarctica is melting and filling them up. Everybody knows that.

3   Y   2015 Apr 4, 5:59am  

Through the god given miracle of evaporation and precipitation, antarctica is contributing their fair share...

Ceffer says

The Great Lakes have more water because Antarctica is melting and filling them up. Everybody knows that.

4   CL   2015 Apr 4, 6:23am  

Screw Keystone! Build it from the Great Lakes to California and give me my goddamned water. Those rubes don't even bathe every day!

5   Strategist   2015 Apr 4, 8:20am  

Nice article Indigenous.
From the article:
"As a result, growers don’t have to face the real-life costs of transporting water to their farms. They only need consider the subsidized price, which is far below what it would be in a private market. Consequently, water usage for growers across the West is much greater than what it would be were there a functioning market for water in the region."

This is a PERFECT example of subsidies creating an "inefficient allocation of scarce resources"
There is no water shortage with the infrastructure we have in place, it's just dumb politicians and greedy billionaires.

6   indigenous   2015 Apr 4, 8:49am  

anonymous says

indigenous - Since your whacking on Moonbeam as to what he is not telling the people in California, why not tell us how many Republican Governors were in office since the Bureau of Reclamation was created in 1902 and really helped create this mess. Hint - the number is skewed heavily in favor of the Republicans be honest about this whole matter. Moonbeam (idiot that he is and is certainly worthy of criticism) didn't create this mess all on his own since he took office but during the 20 years I lived there I don't seem to recall much about conserving for the future from either party including the Great Communicator. How quaint...

My pet peeves with Moonbeam is the bullet train and the public unions. Mostly the latter.

You confuse me with Republicans, not me.

Actually the bigger problem is the water is too cheap to the farmers. I.E. the water is subsidized. Albeit the central valley produces a large percentage of the crops for the US, but would it if they did not have cheap water? Don't know.

I wonder if the same could be said for the draining of the Ogallala Aquifer to make a energy negative ethanol which would not exist if not subsidized, not to mention that corn syrup would not exist if not for sugar tariffs.

7   indigenous   2015 Apr 4, 8:50am  

Strategist says

This is a PERFECT example of subsidies creating an "inefficient allocation of scarce resources"

Very Good.

8   justme   2015 Apr 4, 9:33am  

What nonsense. Jerry Brown is pretty much the best Governor California has had since, well, since last time Jerry Brown was Governor.

9   indigenous   2015 Apr 4, 9:40am  

justme says

What nonsense. Jerry Brown is pretty much the best Governor California has had since, well, since last time Jerry Brown was Governor.

Obviously the majority of Californians would agree with you, of course they are functionally illiterate...

10   Blurtman   2015 Apr 4, 9:43am  

I don't think he talks about schtooping Linda Ronstadt either.

11   Strategist   2015 Apr 4, 10:08am  

indigenous says

Actually the bigger problem is the water is too cheap to the farmers. I.E. the water is subsidized. Albeit the central valley produces a large percentage of the crops for the US, but would it if they did not have cheap water? Don't know.

Essentially our taxes are so high because we subsidize the food costs for the rest of the nation.
Call Crazy, Zzyzzx, I did not even get a "Thank You" card from you two. I got called a "sucker" :(

12   HEY YOU   2015 Apr 4, 10:10am  

Has anyone compiled a list of Rep/Con/Tea businesses that get a Big Govt. Redistributed Tax Dollar subsidy?
Maybe a list of Rep/Con/Tea individuals could be the next list.

13   HydroCabron   2015 Apr 4, 10:29pm  

Bechtel, Kaiser, Morrison-Knudson and a few others had to pool their resources to even bid on Hoover Dam, so it was unlikely that private funding for it would have occurred in the 1920s, or possibly ever. The transcontinental railroad was not a private project; it occurred thanks to a nexus of public bribe-taking and giveaways to private interests.

The initial build-out of the Internet was a government thing. No idea if we would have it yet, were it up to private industry. Similarly, most successful medical research comes out of universities, not commercial laboratories. The Interstate Highways, such a boon to Walmart and all manner of other "self-made" men and women, were planned and paid for by the government and the taxpayers, respectively.

Our Job Creators? When it comes to a lot of infrastructure, they didn't build that. [Last time I used this, some idiot pointed out that it was exactly what Obama said. No shit.]

It's quite possible that, without the projects mentioned above, the United States would still be a third-world country, as we were in the 19th century.

With that out of the way: most of the Bureau of Reclamation and Army Corp of Engineers water projects should never have occurred. Hoover Dam was a good idea; the Grand Coulee Dam was essential in aluminum production in WWII. Without going case by case through the list, the vast majority of remaining water projects are complete and utter crap. Carter - history's greatest monster - knew this, and naively assumed he could cut water projects out of the budget in 1977. Prominent senators shut him down real fast on that issue.

I think a lot of small-to-medium stuff can be left to the marketplace. If you believe this will bring happiness to those being served, however, I would look to public attitudes to railroads in the early 20th century. Even in many cities served by 3 or more competing railroads, rates were high and service poor. Hatred of railroads is one of the biggest reasons many Americans used to be sympathetic to socialism, because railroads were the Comcast of their time.

Los Angeles and Phoenix would be smaller today if the government had let private hands deliver the water. The question remains: just how badly the water oligarchs would have raped the inhabitants? Would water service today look more like dealing with Comcast and the railroads?

Read Cadillac Desert. It's a book that every citizen of the southwestern states should read. Keep a barf bag handy.

14   indigenous   2015 Apr 5, 2:54pm  

I suppose that the standard of living would be much higher if everything was funded by the government then?

15   HydroCabron   2015 Apr 5, 5:23pm  

indigenous says

I suppose that the standard of living would be much higher if everything was funded by the government then?

Consider 5 gradations of believers in government power:

1) Total central planning, with input/output analysis and committees governing everything - few believers, and not always practiced even in communist regimes

2) Strong socialism run by committees, restricted free enterprise and few to no large firms - something like Vietnam before the late 1980s, but more centralized than any European country

3) A mix of government and free enterprise, with government having control over some activities, and private business, even massive corporations, allowed to run everything else; this is around where the Conservative Party is in Britain, and is also the home of the radical left in the United States

4) Democratic oligarchy. Government has little role but to reign in blatantly criminal behaviour, even white collar, and set the most rudimentary rules for markets

5) Yahoo bedlam: Government exists only to gas blacks for violent crime, protect wealth, and force women to explain every miscarriage. The wealthy own the courts, and the miniscule government does not act without first consulting them. Basically Somalia without abortion clinics. Tear up the John Birch Society card because they use compact flourescents at their office - that kind of thing. This is where you live.

Most posters on this forum live in the 4 zone. Unlike you, they are pragmatic, and comprehend that reality is complex and non-ideological. You make the feeble-minded mistake of assuming that anyone not in zone 5 is in zone 1, because you believe everyone to be the same armchair jackanapes that you are.

16   zzyzzx   2015 Apr 5, 6:07pm  

Strategist says

Essentially our taxes are so high because we subsidize the food costs for the rest of the nation.

It's because your state specific regulations really cost you, that and your generous welfare and pension benefits.

As to how that relates to water issues in California, if they didn't welcome Illegals so much, there would be more water for Americans there.

17   indigenous   2015 Apr 5, 6:37pm  

HydroCabron says

Most posters on this forum live in the 4 zone. Unlike you, they are pragmatic, and comprehend that reality is complex and non-ideological. You make the feeble-minded mistake of assuming that anyone not in zone 5 is in zone 1, because you believe everyone to be the same armchair jackanapes that you are.

Your feeble minded categories are ambiguous and not the conventionally agreed upon categories.

18   Strategist   2015 Apr 5, 6:59pm  

Call it Crazy says

That's exactly what Nancy Pelosi thinks:

"Unemployment insurance, the economists tell us, return $2 for every $1 that is put out there for unemployment insurance," Speaker Nancy Pelosi said on the House floor.

Those are words taken out of context by politicians like Pelosi. The economists are probably referring to the multiplier effect of a dollar spent. The dumb politicians latch on to that for their selfish ideology, not taking into account that same dollar invested by the entrepreneur who got taxed would have the same effect of creating $2.00. The jobs created by that same entrepreneur would enable another $2.00 to be returned to us. In other words, a total of $4.00.
It's a net loss of $2.00 vs the net gain gain of $2.00 that Pelosi claims. Moral of the story....Never trust a politician.

19   Strategist   2015 Apr 5, 7:07pm  

Strategist says

It's a net loss of $2.00 vs the net gain gain of $2.00 that Pelosi claims. Moral of the story....Never trust a politician.

I would add if what she said was really true, everyone should get $10,000 per month making us all rich in the process.

20   indigenous   2015 Apr 5, 7:18pm  

Call it Crazy says

See what you guys in CA vote for, IDIOTS!!!

Have you seen pictures of the constituents that vote for her?

21   Strategist   2015 Apr 5, 7:25pm  

indigenous says

Call it Crazy says

See what you guys in CA vote for, IDIOTS!!!

Have you seen pictures of the constituents that vote for her?

Please don't gross me out. I'm about to have dinner.

22   indigenous   2015 Apr 5, 7:26pm  

That sounds like a challenge...

23   indigenous   2015 Apr 5, 8:43pm  

Yes, but I was trying not to ruin strategist's dinner.

24   indigenous   2015 Apr 6, 6:31am  

I watched the movie China Town again, great movie, this story makes me wonder how much fiction was in the movie.

25   Entitlemented   2015 Apr 6, 10:00am  

Sir,

Repcontealiberterianos proposed water solutions in the past:

1. Water pipeline from Canada
2. Water pipeline from midwest, Minnesota on down.
3. Reserviors at max annual rainfall locations in California.

These were dismissed/disregarded for troutalogical reasons.

26   indigenous   2015 Apr 6, 10:02am  

Or quit subsidizing water, as 80% of water usage goes to the big farms?

Or is that too crazy?

27   indigenous   2015 Apr 12, 9:03am  

I wish we could add the Calif legislators to the endangered species list. I vote for a unicameral legislative body that meets for 6 months every other year.

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